Income Tax Act

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This Act is current to September 24, 2024
See the Tables of Legislative Changes for this Act’s legislative history, including any changes not in force.

Income Tax Act

[RSBC 1996] CHAPTER 215

Part 16 — Clean Buildings Tax Credit

Definitions

271 In this Part:

"architect" has the same meaning as in section 1 of the Architects Act;

"eligible building" means a building, situated in British Columbia, that belongs only to one or more of the following types:

(a) a multi-unit residential building;

(b) a prescribed type of building;

"eligible taxpayer", in relation to a taxation year, means

(a) an individual subject to tax under section 2 (1) for the taxation year, or

(b) a corporation subject to tax under section 2 (2) for the taxation year, other than a corporation that is exempt from tax under section 27 at any time in the taxation year;

"energy use intensity" or "EUI", in relation to a building, means the quotient of the following, as determined in accordance with the regulations:

(a) the net energy of the building for a year;

(b) the floor area of the building;

"multi-unit residential building" means a residential building that contains 4 or more dwelling units;

"qualified person" means

(a) an architect,

(b) a professional engineer, or

"qualifying expenditure", of a taxpayer, means an outlay or expense made or incurred by the taxpayer that is directly attributable to a qualifying retrofit and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the retrofit or for a certificate under section 277 (2) (b) for the retrofit, but does not include such an outlay or expense

(a) that cannot reasonably be considered to have been made or incurred for the purpose of reducing EUI,

(b) made or incurred under the terms of an agreement entered into before February 23, 2022,

(d) made or incurred by the taxpayer in the course of providing, for consideration, goods or services in respect of the retrofit,

(e) to acquire goods that have been used, or acquired for use or lease, by the taxpayer for any purpose before they were acquired by the taxpayer,

(f) to acquire a property that can be used independently of the retrofit,

(g) to acquire a household appliance,

(h) to acquire an electronic home-entertainment device,

(i) that is the cost of annual, recurring or routine repair, maintenance or service,

(j) for financing costs in respect of the retrofit,

(k) in respect of goods or services provided by a person not dealing at arm's length with the taxpayer, unless the person is registered for the purposes of Part IX of the Excise Tax Act (Canada), or

(l) that is prescribed;

"qualifying retrofit" means a retrofit that

(a) is a retrofit of an eligible building,

(b) is completed on or before March 31, 2026,

(d) is certified under section 277 (3);

"retrofit" means an alteration or renovation of a building;

"target EUI", in relation to a building, means the target EUI prescribed for the building.

Clean buildings tax credit

272 An eligible taxpayer may claim a tax credit, for the taxation year immediately after the taxation year in which the taxpayer completes a qualifying retrofit, in the amount equal to 5% of the difference between

(a) the total of all amounts each of which is a qualifying expenditure of the taxpayer that is directly attributable to the retrofit and has not been used by another taxpayer in the calculation of a credit claimed by that other taxpayer under this section, and

(b) the total of all amounts each of which is received or receivable by any person or partnership, or that can reasonably be expected to be received by any person or partnership, in respect of a qualifying expenditure referred to in paragraph (a) and that is

(i) provided under a program and designed to provide assistance with the cost of the alteration or renovation of a building or land on which the building is situated,

(ii) provided as a forgivable loan and designed to provide permanent or temporary assistance with, or financing for, the cost of the alteration or renovation of a building or land on which the building is situated, but only to the extent that the loan, or a portion of it, has not been repaid under a legal obligation to do so, or

(iii) provided under any prescribed program.

Credit amount in respect of partnerships

273 (1) If an eligible taxpayer is a member of a partnership, the taxpayer may claim as a tax credit, for the taxation year of the taxpayer immediately after the taxation year of the taxpayer in which the partnership completes a qualifying retrofit, the appropriate portion of the amount equal to 5% of the difference between

(a) the total of all amounts each of which is a qualifying expenditure of the partnership that is directly attributable to the retrofit and has not been used by another taxpayer in the calculation of a credit claimed by that other taxpayer under this section, and

(i) provided under a program and designed to provide assistance with the cost of the alteration or renovation of a building or land on which the building is situated,

(iii) provided under any prescribed program.

(2) For the purpose of determining the amount that an eligible taxpayer may claim under subsection (1) in respect of a partnership, the following rules apply:

(a) in section 271 [definitions], in the definition of "qualifying expenditure", the references to "taxpayer" are to be read as references to "partnership";

(b) the amount referred to in subsection (1) of this section is determined as if the partnership were a person;

(c) the appropriate portion is that portion that may reasonably be considered to be the taxpayer's share of the amount determined under subsection (1);

(d) if the taxpayer is at any time in a taxation year of the taxpayer a member of a particular partnership that is a member of another partnership,

(i) the taxpayer is deemed to be a member of the other partnership, and

(ii) despite paragraph (c), the taxpayer's appropriate portion of the amount determined under subsection (1) for the other partnership is deemed to equal that portion that may reasonably be considered to be that share of the amount determined under subsection (1) to which the taxpayer is directly or indirectly entitled.

Amalgamations and wind ups

274 (1) If 2 or more corporations amalgamate within the meaning of section 87 (1) of the federal Act, the new corporation is deemed, for the purposes of this Part, to be the continuation of each of its predecessor corporations.

(2) If a subsidiary corporation is wound up within the meaning of section 88 (1) of the federal Act, the parent corporation is deemed, for the purposes of this Part, to be the continuation of the subsidiary corporation.

Bankruptcy

275 A taxpayer who becomes bankrupt on or before the date on which the taxpayer files an application under section 281 (1) in relation to a qualifying retrofit is not entitled to claim outlays or expenses made or incurred on or before the date of the bankruptcy.

Deemed payment

276 A taxpayer that has claimed and is eligible for a tax credit under this Part for a taxation year is deemed to have paid, at the time referred to in section 156.1 (4) or 157 (1) (b) of the federal Act, as the applicable section relates to the taxation year of the taxpayer, the amount of the tax credit on account of the taxpayer's tax payable under this Act.

Certification

277 (1) A taxpayer or partnership may apply to the Commissioner of Income Tax to have a retrofit certified for the purposes of claiming a tax credit under this Part.

(2) In applying under subsection (1) for certification, an applicant must provide the following to the Commissioner of Income Tax:

(a) an application in the form, and containing the information, required by the Commissioner of Income Tax;

(b) a certificate given by a qualified person on or before September 30, 2027 in the form, and containing the information, required by the Commissioner of Income Tax that

(i) states that the retrofit has reduced the EUI of the building, and

(ii) sets out

(A) the target EUI for the building,

(B) the EUI of the building for a year that ends within 12 months before the retrofit begins, and

(3) On receiving an application under this section, the Commissioner of Income Tax must certify a retrofit if the Commissioner of Income Tax is satisfied, on the basis of the information provided by the applicant and any other information available to the Commissioner of Income Tax, that

(a) the building is an eligible building,

(b) the retrofit has reduced the EUI of the building, and

(c) the EUI of the building for the year that is the subject of the certificate of the qualified person under subsection (2) (b) (ii) (C) is equal to or lower than the target EUI for the building.

(4) An application under this section must be filed on or before September 30, 2027.

Revocation of certificates

278 (1) A certificate issued under section 277 (3) may be revoked by the Commissioner of Income Tax if

(a) an omission or incorrect statement was made for the purpose of obtaining the certificate, or

(b) one or more of the criteria set out in section 277 (3) is not met.

(2) A certificate that is revoked by the Commissioner of Income Tax is deemed never to have been issued.

Notice of refusal or revocation

279 (1) If the Commissioner of Income Tax refuses to issue a certificate for which application is made under section 277, the Commissioner of Income Tax must promptly give notice of that refusal, together with reasons for the refusal, to the applicant.

(2) If the Commissioner of Income Tax revokes a certificate issued under section 277 (3), the Commissioner of Income Tax must promptly give notice of that revocation, together with reasons for the revocation, to the applicant taxpayer and the minister.

Reconsiderations and appeals

280 (1) Any decision made under this Part by or on behalf of the Commissioner of Income Tax may be reconsidered and confirmed, reversed or varied by or on behalf of the Commissioner of Income Tax.

(2) Without limiting any provision of this Act or the federal Act, a taxpayer may appeal, in accordance with subsection (3), any of the following:

(a) a decision of the Commissioner of Income Tax to refuse to certify a retrofit under section 277 (3);

(b) a decision of the Commissioner of Income Tax to revoke the certification of a retrofit under section 278 (1).

(3) An appeal must be brought in the Supreme Court, by way of a petition proceeding, within 120 days after the date of any notice of the decision provided by the Commissioner of Income Tax.

Filing requirements

281 (1) A taxpayer that wishes to claim a tax credit under this Part in respect of a taxation year must file, with the return of income filed by the taxpayer under section 29 for that taxation year, an application for the tax credit in the form, and containing the information, required by the Commissioner of Income Tax.

(2) A taxpayer is not entitled to a tax credit under this Part in respect of a taxation year unless, within 18 months after the end of the taxation year, the taxpayer files the form containing the information required under subsection (1).

Powers of audit

282 Without limiting any provision of this Act or the federal Act, for the purpose of determining whether a taxpayer is eligible for a tax credit under this Part, the Commissioner of Income Tax has powers equivalent to the federal minister under sections 230 (3), 231 to 231.5 and 231.7 of the federal Act, and for that purpose those sections apply.

Power to make regulations

283 (1) Without limiting section 48 (1) and (2) [power to make regulations], the Lieutenant Governor in Council may make regulations as follows:

(a) respecting the determination of the EUI for a building and a year for the purposes of the definition of "energy use intensity" in section 271, including, without limitation, respecting the determination of

(i) the net energy of the building, and

(ii) the floor area of the building;

(b) prescribing target EUIs for the purposes of the definition of "target EUI" in section 271, or a method for determining target EUIs.

(2) In making a regulation for the purposes of this Part, the Lieutenant Governor in Council may define classes of buildings and make different regulations for different classes of buildings.

(3) A regulation made for the purposes of this Part may be made retroactive to February 23, 2022 or a later date, and if made retroactive is deemed to have come into force on the specified date.